Milwaukee Chocolate? Overcoming the Provenance Paradox

Last Updated Dec 2, 2010 8:46 AM EST

Bias comes in many insidious flavors: race, gender, age, to name just a few of the most popular. But consumers often show another bias: toward country origin of product.

To wit, we are likely to pay more for chocolate that comes from Belgium, watches from Switzerland and wine from France. This makes life hellish for marketers of chocolates from, say, Venezuela, who want to, deserve to, command premium prices for their products but bump up against what Harvard Business School professor Rohit Deshpandé calls the "provenance paradox."

"A product's country of origin establishes its authenticity..." Deshpande writes in the December issue of Harvard Business Review. "Competing products from other countries -- especially developing markets -- are perceived as less authentic. Even when their quality is on par with that of established players, the developing-market firms can't command a fair price. The lower price, in turn, reinforces the idea that the offering isn't as good and that the region doesn't make premium products."

There are ways to overcome national bias, and Deshpande lists five strategies for doing so. Here's two of them:

1. Build a Brand for the Long Haul
Examples: Nissan (née Datsun), Honda, Toyota

The strategy: Follow Japanese companies that, over decades, created brand-building strategies to overcome stereotypes and misperceptions. Eventually, move upmarket to create luxury brands like Infiniti, Acura, and Lexus.

The threat: This patient approach requires strategic and financial commitment that many aren't willing to make.

2. Flaunt Your Country of Origin
Example: Colombian coffee

The strategy: Take an aggressive approach to change cultural perceptions. Colombian coffee built two brands--"100% Colombian Coffee" and "Juan Valdez"--to transform the country's image from negative (source of illegal drugs) to positive (robust coffee).

The threat: This risky strategy requires deeply engaged brand management.

What quickly becomes apparent from reading Deshpande's analysis is that overcoming the provenance paradox must be one of the hardest jobs in marketing. Take a crack at it. Tell us your strategy for introducing a high-end chocolate from your location in Milwaukee. You know, the home of Schlitz, the beer that made Milwaukee famous.

(Image by Flickr user Ganymedes Costagravas, CC 2.0)

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.